Roku and Apollo team up on Starz bid

Roku is teaming with Apollo Global Management on a bid for a minority stake in Lionsgate's Starz, a source confirms to Axios.

Why it matters: Lionsgate has been looking to offload Starz either through a spinoff or outright sale since last November. It's widely viewed as a way for Lionsgate to slim down before seeking its own buyer.

• It would also give Roku its first ownership stake in a content company.

Details: Roku and Apollo could acquire as much as a 20% stake, according to the Wall Street Journal, which first reported the news Tuesday.

• The Roku/Apollo bid is one of multiple bids Lionsgate is considering, The Hollywood Reporter reported.

The big picture: Roku has been ramping up its content investments, beginning with its acquisition of Quibi's library last year.

• Just last week, Roku signed an output deal with Lionsgate — the streaming company's first — that will make the studio's upcoming theatrical films available exclusively on The Roku Channel for a short time.
• Roku's eventual push into studio ownership has been a popular prediction from many in the entertainment industry.

Catch up quick: Lionsgate acquired Starz for $4.4 billion in 2016, but the pay cable network/streaming service has been a drag on the studio's balance sheet.

• The combined company is currently valued at around $3 billion, more than $1 billion less than what it paid for Starz.
• The debt from the acquisition has weighed down the company's stock. Executives think the two would be better valued as separate entities.

By the numbers: Starz has just shy of 20 million global subscribers for its StarzPlay streaming service as of the end of 2021.

• Lionsgate will report its first-quarter earnings later this month.